Veto the Energy Bill(s)?

Too early to say whether President Bush should veto the energy bills, a possibility raised in a recent column at The Heartland Institute. For one thing, as this New York Times story indicated last week, it’s looking very difficult for the House and Senate to work out their differences by the end of the year. You can’t veto a non-bill.

From the manufacturing perspective, the various pieces of legislation include useful provisions to encourage energy efficiency, conservation and alternative fuels. But there are also some really BAD things, like increased taxes on energy production, price controls (resulting from anti-gouging language), and renewable portfolio standards, requiring utilities (i.e., consumers) to purchase 15 percent of their power from renewable sources by 2020.

“In the House bill, the definition of renewable power excludes many renewable power sources and fails to account for regional differences in renewable capacity,” said Rosario Palmieri, director of energy and resources policy at the National Association of Manufacturers. “For example, the Southeast has few wind sources, few geothermal resources, and few solar sources due to regional weather patterns. The House bill really sticks it to the Southeast, which will be clobbered by higher electricity prices.”

The automotive fuel economy mandate, present in the Senate legislation but not in the House bill, would require automobiles to average 35 miles per gallon by 2020. Automobile experts report the only feasible way to meet the mandate is to shrink the size and reduce the weight and crashworthiness of current vehicles.

“We are on board with a CAFE increase, but it must be reasonable,” Palmieri said. “The Senate timeline is simply undoable. Automobile manufacturers need more time to come up with the technological innovations necessary for substantial mileage gains.”

The safety issue seems to have dropped a little bit in the public debate about CAFE, but it still merits attention. Compel manufacturers to produce more expensive, less safe cars that consumers don’t want to buy? There’s a term for that kind of engineering: “Politics.” And the solution to it may well be a president’s veto.